41 ms·
U.S. annual inflation rate drops to 8.5%
- endisneigh 4y agoWhat a shocker - drastic increases in the price of energy result in inflation, energy price goes down, inflation also begins to go down.
- fnordpiglet 4y agoIt’s almost like there’s some relationship between supply, demand, and price. It’s ok I’m sure google is working on an AI model to establish that.
- suplywut 4y agoWhy is food, energy, medical care, housing subject to supply and demand? Why are the lifeblood of the species constrained on demand and flowing freely when they look away? It certainly is convenient for you to believe the masses have to accept austerity in deference to normal humans who repeat these handy phrases and point to any old phenomena they control, assigning an immutable key-value pair to your memory. “Gather ‘round, children; it’s time to recite the spoken traditions! Austerity is for the poor. Authority is for the rich.” We could see this as stochastic terrorism; there’s no need to give the powers that be a free pass when it’s clear their power is built on reciting politically correct “truth” not serving the species and public. Lucking into wealth does not place someones biology on another plane of cognition, or imbue magical powers of insight. Edit: rest assured in proper social tradition I am indifferent to the literal state of anyone else. If some avoidable calamity should impact you or I have am in a position to empower myself at your expense, I am all in. Just optimizing for myself, in-line with the politically correct chants; Powell said there will be pain to people, not him of course but others. I’m just following the leader too.
- adamdusty 4y agoEverything is subject to supply and demand. Why would those four things not be? Even if the money was coming from the government they would all still be subject to supply and demand. Even if money didn't exist those things would all be subject to supply and demand. What exactly do you propose to change that?
- suplywut 4y agoIt’s pretty simple; stop coddling some peoples figurative identity. Rather than make a social game of merely “seeing” normal humans who are “special” in politically correct traditional terms, end specialness. Subject Powell, Bezos, and the like to the same material truth as the masses. Electoral turnovers improve economic outlooks for public: https://www.nber.org/papers/w29766 https://www.nber.org/papers/w29766 Give everyone equal policing authority: https://aeon.co/essays/game-theory-s-cure-for-corruption-make-us-all-cops https://aeon.co/essays/game-theory-s-cure-for-corruption-mak... End the long game of abstract agency control used to coddle they who control the interpretation of scripture from a long dead past: https://www.nytimes.com/1997/02/27/business/job-insecurity-of-workers-is-a-big-factor-in-fed-policy.html https://www.nytimes.com/1997/02/27/business/job-insecurity-o... Shift the real burden of providing something real to a bunch of non-contributors who stubbornly demand control of our agency so they can sit and engage in meta-analysis. Make the con men yank on their own boot straps. Economists and the likes real contribution is a whole of qualifying daily life that will occur regardless of their meta-analysis existing. History will have happened regardless of historians observing and writing books on it. Make people actually support themselves rather than ride on book sales of figurative stature. Such folks tend to use a lot more resources for output of insignificant value to keeping their meat bag alive. Why do they get to live in a bubble? They can grow some potatoes in between book deals.
- fnordpiglet 4y agoAre you saying if there’s five boxes of food and ten people supply and demand don’t matter under some political regime?
- dkrich 4y agoRight now oil and housing are basically what are driving the narrative and as a result, fed policy. I don’t necessarily expect that to last forever but currently it’s very clear that the fed is basically reacting to monthly cpi numbers and the narrative that results from them. This fed has become very easy to predict, hence the massive moves in yields/stocks this morning. That said, if oil were to go back up for a few weeks to 110+ I’d expect the next cpi print to be higher than expected and this move to largely reverse. Kind of crazy so much is based on the price of a commodity nobody can really control, but it’s where we are.
- 300bps 4y agoEnergy prices down 4.6% Gasoline prices down 7.7% Food prices up 1.1% Shelter prices up 0.5% So the minor overall reduction was by far gasoline.
- tootie 4y agoYup. Since the Fed is primarily concerned with Core CPI and the employment numbers are still strong, tightening is going to continue.
- mercy_dude 4y agoHow much of this is due to the release of oil reserve?
- bombcar 4y agoProbably actually very little - the amounts released aren't much compared to consumption; the price of gas fluctuates even under normal conditions due to large numbers of factors. It's likely the price shot up and overshot what it "should be" (assuming such perfect price exists) and now it's settling down. The question is where the new normal will be.
- snarf21 4y agoWhich makes sense because all other things in the CPI use oil to make and distribute goods. I've stopped paying attention to inflation numbers because they are all lies. The current CPI basket is complete nonsense. The numbers are built in such a way to always have low inflation unless oil prices go way up. Before this recent spike, inflation was "at historic lows and near zero". Really? Things aren't any more expensive in 2019 than then were in 2002? Nonsense.
- gus_massa 4y agoPerhaps I misunderstood your comment, but note that "at historic lows and near zero" means that the prices in 2022 are very similar to the prices in 2021, not that the prices went back to the old values in 2019.
- isusmelj 4y agoI'm surprised how much everything seems to depend on fuel prices. If gas & oil goes up everything gets more expensive as production and transportation costs increase.
- h0mie 4y ago
- nxm 4y agoExactly. It reduced slightly to still a very high level.
- roflyear 4y agoThe reduction was one of the largest ever, so I would say drops qualifies!
- signatoremo 4y agoSo it is a drop? Why people here have to reduce to arguing the semantics when they themselves are prone to hyperbolic?
- signatoremo 4y agoInflation is by definition the increase in prices. It is a drop because the rate of increase is slowing down. Do you think people will mistake it with deflation?
- lake_vincent 4y ago
- erispoe 4y agoWhat is your evidence of higher inflation?
- roflyear 4y agoIt's his feelings, but that actually does have a large economic impact.
- fnordpiglet 4y agoI’m sure he’s a great programmer though.
- lake_vincent 4y agohttps://www.forbes.com/sites/vineerbhansali/2021/02/23/why-paying-attention-to-asset-price-inflation-is-important-for-investors/?sh=240933c84399 https://www.forbes.com/sites/vineerbhansali/2021/02/23/why-p... What the Fed calls inflation is not what you think it is.
- carnitine 4y agoWhy? That says financial assets aren’t included in reporting of inflation. Why would one think they would be?
- guipsp 4y agoAn article by an investment fund ceo who says we should care about investment prices instead of food prices
- fnordpiglet 4y agoGood thing they don’t publish the inflation number! Checks and balances!
- 4y ago
- wun0ne 4y agoJust as the transient inflation camp emptied...
- evrydayhustling 4y agoI'm not sure there's a transient inflation camp to go back to - the cornerstone there was the idea that inflation could correct without big impacts on capital market, real economy, or fed policy. All of those ships have sailed. The upshot is it should be possible to discuss when inflation will slow down without being a denialist.
- partiallypro 4y agoIt wouldn't be transient though...it's been 1.5 years and prices aren't going down, they are just rising at a slower pace. I don't view that as "transitory." The transitory camp thought it would be a few months, it's been almost 2 years of relentless price hikes.
- m0llusk 4y agoBecause much of the inflation, especially that which hurt consumers most, was transient. That is clearly shown by how gas prices are dropping faster than ever before.
- _-david-_ 4y agoWhy don't you look at something other than gas? Believe it or not but people need to eat food for example. Also, the gas prices are still significantly higher than they were a few years ago so dropping isn't really a big deal until it becomes affordable again. Lastly, one reason the price is dropping is due to releasing the reserves. When that stops (and it will have to eventually) the price will increase again.
- scrlk 4y agoCore inflation is +5.9% YoY (lower than expectations) I expect the Fed to declare "mission accomplished" via a 50 bps hike in September if the Aug CPI print is lower.
- queuebert 4y agoAren't they in "data dependent" mode?
- scrlk 4y agoFrom Powell's recent FOMC press conference: >So what are we going to be looking at? You know, we’ll be looking at the incoming data, as I mentioned, and that’ll start with economic activity. Are we seeing the slowdown that we — the slowdown in economic activity that we think we need, and there is some evidence that we are at this time. Economic activity data is likely to continue to worsen between now and the September FOMC meeting, so I believe there's a high likelihood that they are opting for +50 bps rather than +75 bps. This would signal that we are getting close to the end of the tightening cycle. You can see it in the price of risk assets today after the CPI data release - everything is up (markets are forward looking).
- trident5000 4y agoDirectionality is the easy battle, actually getting to 2% is going to be more difficult. Powell said its important to hammer inflation before the psychological effect takes place and it becomes a spiral. I dont think they are going to let up as long as were above 4%.
- evrydayhustling 4y agoIt's a relief to see actual price drops in fuel and transport services hit before the end of the Summer travel season. Barring additional oil disruption, we can hope to see other prices (e.g. food) correct -- or at least stop growing so fast -- at a lag.
- dwighttk 4y agoFood might have other issues that keep it from becoming nicer to the consumer
- partiallypro 4y agoPrices are sticky, food prices won't be coming down much, if at all. It's not a constant consumer market fluctuation like oil/gas.
- grumple 4y agoCompetition for food sales is pretty high though. If sales go down, or someone sees a chance to take market share, prices will come down.
- dereg 4y agoIt's worth nothing that China, the world's largest consumer of jet fuel, has yet to restart its tourism machine, which will increase demand.
- peteey 4y agoFuel cost is down in part due to releasing oil from the US Strategic Petroleum Reserve. The release will stop in October. https://www.energy.gov/articles/doe-issues-fifth-emergency-notice-sale-crude-oil-strategic-petroleum-reserve https://www.energy.gov/articles/doe-issues-fifth-emergency-n...
- Kye 4y agoThat's around the same time gas stations switch to cheaper winter-grade fuel and demand drops, so maybe the price drop will stick.
- altdataseller 4y agoWhats the goal? At what inflation rate will the Fed be happy with?
- deleted 4y ago[deleted]
- scrlk 4y agoThe Fed's inflation target is 2%.
- eCa 4y ago2% has been a long time goal. https://www.federalreserve.gov/faqs/economy_14400.htm https://www.federalreserve.gov/faqs/economy_14400.htm
- jollyllama 4y agoSo they ought to keep hiking it then, if that's truly the goal.
- curiousllama 4y agoMore complicated. Inflation expectations, supply chain fixes, fiscal policy, data/reporting lag, etc all play in too. If it's declining, let it decline. Fed can only influence, not dictate, inflation.
- moistofreason 4y agoThey can, and have been, printing money like there is no tomorrow… they are literally the only body that can inflate the USD.
- orwin 4y agoNo, the states and the federal government can too, by destroying money (IE increasing taxes). Inflation, especially dollar inflation, is more complicated than 'printing more = inflation'.
- brianmcc 4y agoGood. Now we can look forward to interest rate cuts to deal with the recession...
- vinyl7 4y agoI hope not, I'm tired of this bubbly fake economy of the past decade. Massive misallocation of capital into pointless unprofitable tech companies
- malfist 4y agoYes, I hate seeing my 401K grow too. Let's have a recession, it'll be fun!
- vinyl7 4y agoIs it really growing if it's a fake overstimulated economy?
- rajamaka 4y agoIf it means not kicking the ball down to my children's generation, so be it.
- Workaccount2 4y agoThere are other public companies than unprofitable tech cash blockholes.
- gurumeditations 4y agoIn a fake economy, money flows to the top, which includes people who have significant holdings in 401Ks. Most people never get paid enough to even fully save up for retirement by the end.
- nine_zeros 4y agoI would expect the fed to just keep rates stable instead of cutting them
- 4y ago
- yieldcrv 4y agois there really no better way to calculate this? 9.1% between june 2021 and june 2022 8.5% between july 2021 and july 2022 its just not really conveying everything... well?
- mrfox321 4y agoYou need a large time window or error bars will be large. Annual numbers are also canon. People think on yearly timescales
- sf_rob 4y agoIMO, you should be watching the month over month numbers and only using YoY to contextualize. Looking at the delta of YoY data doesn't tell you much without knowing the rate for the monthly report that was dropped and the monthly report that was gained.
- HPsquared 4y agoYoY averages out seasonality though, a lot of things go through annual cycles.
- kurupt213 4y agothey don't want make it easy to figure out how much prices have spiked since inflation took off
- jhallenworld 4y agohttps://www.mass.gov/info-details/massachusetts-home-heating-fuels-prices https://www.mass.gov/info-details/massachusetts-home-heating... Heating oil (diesel) is still 70% higher than last year. I'm about to delete the oil heat, so have been watching this.. I will certainly be annoyed if it crashes back to the $2s next week (right after the conversion..) https://www.eia.gov/dnav/ng/hist/n3010ma3m.htm https://www.eia.gov/dnav/ng/hist/n3010ma3m.htm https://fred.stlouisfed.org/series/APUS11A72610 https://fred.stlouisfed.org/series/APUS11A72610 BTW, this site allows you to compare the different heating costs: you have to enter the current prices: https://www.amsenergy.com/fuel-cost-calculator/ https://www.amsenergy.com/fuel-cost-calculator/ $35.78 oil $24.94 gas $79.13 electricity resistance (100%) $39.57 electricity heat pump (200%) (per million BTUs output from heater)
- Retric 4y ago2020, 2021, and 2022 oil prices have been a cause of rather than a result of inflation. It dropped from 2$ in 2019 to a low of 0.70$ in 2020, then hit a high of 4.40 in 2022 and just dropped to 3.30.
- roflyear 4y agoOil heat can be tough, but the prices will go down. I would not change things just as a reaction to these prices...
- jhallenworld 4y agoThere are other reasons: the boiler is from the 1940s (59% efficiency) and the oil tank is at least 30 years old. It's not pretty if the oil tank leaks... https://www.youtube.com/watch?v=djpH8pUSpjM https://www.youtube.com/watch?v=djpH8pUSpjM
- squeaky-clean 4y agoMy building had a boiler fire in December with an ancient oil based boiler. Everyone's okay, but it was not fun.
- 4y ago
- post_break 4y agoGood news I guess. But my electricity price literally doubled. My house insurance is up 30%. My gas bill is up by a lot. Have you seen the price of oreos? The $5 box at Taco Bell is my splurge and I'm trying to cut back on everything I can.
- phkahler 4y agoA Sausage McMuffin and a coke used to cost $2.12 at most locations near me two years ago. Today it varies from $2.95 up to $3.85 (strangely this high value is in Detroit proper where income is lowest vs the burbs). I notice this price varies even at the same locations sometimes, but it's WAY up in general by a solid 50 percent in 2 years.
- shmatt 4y ago
- latency-guy2 4y agoSo, why did these greedy companies not raise prices to this rate when times were good? Surely there's more money exchanging hands when times are fine and dandy.
- shmatt 4y agoThe whole point of this inflation is, times ARE good. People have too much money to spend, the job market is too hot, which is why the fed is raising rates so fast When times are bad, McDonalds sales go way down, then they re-introduce the $1 menu
- treis 4y agoI think a lot of this is a combination of "because everyone else is doing it" and "because we can". I've seen a huge price increase in branded and prepared food products. Staples like fruit, veggies, eggs, etc. has gone up in price but much less than the branded. I also think a lot of companies are running near capacity. Labor market is tight and the supply chain is still reeling from Covid. So there's not really an opportunity to lower/maintain prices to get market share.
- mercy_dude 4y ago
- oblio 4y agoThere are a gazillion independent groups looking at economic data. What makes you think the government is able to falsify these numbers more than usual? This is not Turkey, where they had to use all sorts of proxy measures to figure out the government was lying (and by how much).
- silent_cal 4y agoThe numbers are manipulated by adjustments like substitutions and hedonics.
- oblio 4y ago1. Can you give some examples for both? 2. Is this different from previous years? 3. Isn't there any criticism from reputable sources of these practices? I'd love to read some articles.
- silent_cal 4y agohttps://www.investopedia.com/articles/07/consumerpriceindex.asp https://www.investopedia.com/articles/07/consumerpriceindex.... https://www.bls.gov/cpi/quality-adjustment/questions-and-answers.htm#:~:text=Hedonic%20quality%20adjustment%20refers%20to,introduction%20of%20completely%20new%20products https://www.bls.gov/cpi/quality-adjustment/questions-and-ans.... https://www.bls.gov/opub/btn/volume-1/consumer-price-index-data-quality-how-accurate-is-the-us-cpi.htm#:~:text=The%20CPI%20has%20been%20criticized,comes%20from%20the%20academic%20community https://www.bls.gov/opub/btn/volume-1/consumer-price-index-d....
- mercy_dude 4y ago
- 4y ago
- ambientenv 4y agoIt is interesting, at best, aggravating mostly, that folks are still adamant that we can apply the heuristics of the past to conditions in the present. Evidence suggests we cannot. Governments, government bodies and other vested interests around the globe are covertly managing (taking liberties with the "numbers"?) the downward spiral in order to maintain some semblance of control and not have everything derail too quickly or catastrophically [1]. This includes but not limited to all the movement on digital currencies and ID's, and the dreams of the WEF and associated minions. The climate crisis and the emerging reality that we can no longer live on a finite planet with goals of infinite growth [2] will force discontinuities and catastrophes that are hard to fully imagine, never mind prepare for. There is solid evidence that fossil fuel availability - the cheap to extract kind - is in steady decline now [3], so excitement over falling pump prices is misplaced. The economy is energy and energy is the economy and all of the impacts of our economic and cultural decline have yet to reveal and play themselves out. [1] In economics there is a proposition known as Dornbusch’s Law that states: Crises take longer to arrive than you can imagine, but when they do come, they happen faster than you can possibly imagine. [2] https://www.resilience.org/stories/2022-08-08/the-renewed-clamour-for-growth-ignorance-stupidity-or-immorality/ https://www.resilience.org/stories/2022-08-08/the-renewed-cl... [3] https://www.resilience.org/stories/2022-08-03/the-status-of-global-oil-production-part-1/ https://www.resilience.org/stories/2022-08-03/the-status-of-...
- rossdavidh 4y agoWhile I don't doubt that governments like to bias the numbers, if they are doing it this year to convince us we have no inflation issue, they are doing it very poorly.
- Invictus0 4y agoSir this is a monthly inflation report
- ramesh31 4y agoI'm of the mind that the Fed pulled it off. They did their job this time - crisis averted. We've got a rocky six months ahead, but there will be no recession.
- sampa 4y agoyou wish
- radioactivist 4y agoSo the year over year CPI increase each month this year (starting from January) was 7.5%, 7.9%, 8.5%, 8.3%, 8.6%, 9.1%, 8.5%. So this value has been jumping around a bit as it has been going up. This drop is being taken as good news -- but I worry whether this is really a meaningful drop or whether we are just over interpreting what could be a fundamentally noisy metric?
- roflyear 4y agoOnly time will tell, but it is "good news" in the context of wanting to reduce inflation.
- Mountain_Skies 4y agoCould also be demand destruction starting to slow the increases in prices.
- rootusrootus 4y agoSeems like EV uptake rate, while still just a fraction of total sales, is probably high enough to contribute to demand destruction. Gas prices have come down pretty fast. I wonder if EV adoption goes fast enough that we'll see a period of time when gas prices just crater for a while. A sweet spot of owning an ICE vehicle, but then gas stations will start to close up and ICEV owners could face the same problem EV owners face now but without the easy ability to refuel at their house.
- deleted 4y ago[deleted]
- arbor_day 4y agoEVs are ~1% of cars and ~5% of new car sales. It seems like we have another 5 years until those scale effects start to really kick in.
- rootusrootus 4y ago
- silent_cal 4y agoThese inflation numbers, as I assume other flagged posts have already pointed out, are extremely misleading. Does anyone really think that housing, food, gas, or any other major consumer expense has only risen 8.5% since a year ago?
- jacknews 4y agoRight, all my food staples are +20% from a year ago-ish. I guess TV's are cheaper (and 'better'), so they use that double-plus-goodness to bring down the headline inflation figure. Nevermind you can't eat your TV (which now has ads, by the way) or ride it to work. You could burn it to cook on and heat yourself, I suppose.
- glouwbug 4y agoIf anything TVs serve ads to buy consumerist goods which are up +20%
- Kye 4y agoCPI is like GDP CPI collects certain things some people have decided represent the economy as experienced by ordinary people. How well it works in general and for your experience in particular depends on the choice of items in the basket and how well they match your reality. edit: There's a Planet Money series on GDP. I wouldn't be surprised to see a follow-up on CPI soon.
- silent_cal 4y agoExcept that they are constantly changing the basket to be a basket of cheaper goods. It's pretty bold to be so open about it, but that's what they do - it's manipulated.
- Kye 4y agoYour "except" creates anticipation for disagreement, but you seem to be agreeing with me aside from the claim about manipulation. I didn't say it was accurate.
- Joel_Mckay 4y agoHope the news is true, and not some creative-accounting ;)
- ajoseps 4y agoBLS releases CPI reports every month
- Joel_Mckay 4y agoAgain, another irrelevant comment unrelated to the subject. We shall see how this trend settles out at the end of the year. Enhance your calm. =)
- Kye 4y agoThe BLS reports inflation. It doesn't control inflation. The Federal Reserve does affect it with the fed rate, but it's independent, and the chair was elevated to his current role by Trump, so save the insinuations about this being somehow engineered by Democrats to win the election. I'm no fan of Democrats, but this is absurd.
- Joel_Mckay 4y ago"The Federal Reserve does affect it with the fed rate" In general, it takes some time for this to have any impact on inflation, and in some cases effects may be uncorrelated if markets shift for external reasons. What is a "Democrat", and how is it related to the subject matter? While I can't seem to understand the unjust world theories... I do respect your misguided opinions. Have a gloriously wonderful day. =)
- deanmoriarty 4y agoNo freaking way! My rent just went up 15% (and last year too, which forced me to move out and look for a cheaper apartment), all groceries are up 30% across the board compared to last year, I know because mobile apps show my previous receipts. These are the times I feel dumb for not being a homeowner (despite technically being able to afford it, just didn't want to get locked down in an area for 8+ years to make the rent vs buy math work out, though at these rates of inflation the math would turn around much quicker).
- rhexs 4y agoYeah, but you can buy a 65 inch OLED for $1200, so it balances out!
- bamboozled 4y agoYour mortgage repayments won't go up too?
- deanmoriarty 4y agoNo? In the US a residential mortgage is almost always fixed rate, locked in for the entire term (i.e. 30 years). So it can basically never go up, just down if the opportunity arises and you can willingly refinance your loan as interest rates drop.
- cjrp 4y agoThat's interesting, in the UK it's generally fixed for 2/3/5 years but then reverts to a pretty lousy rate (unless you remortgage to another fix). If you're lucky you fixed just before this all started, and won't have to remortgage for another few years when rates might be dropping again.
- ghaff 4y agoThere are adjustable rate mortgages in the US, but far and away the norm is 15 or 30 year fixed.
- rhexs 4y agoWe did it! Let's drop interest rates back to 0, housing markets are looking a bit shaky.
- i2c10khz 4y agoOne nice thing about inflation is it does not matter what these reports tell you it is as you can easily calculate your real inflation value yourself (based on bills etc).
- deleted 4y ago[deleted]
- donatj 4y agoWhat are the actual metrics they use to measure inflation? My electric bill is 33% higher than previous years, my gas bill is similar. City/Water/Sewer doubled. Trips to the grocery store are up close to 20%, and gasoline doubled. Everything you actually purchase day-to-day is up far more than the inflation benchmarks, so much so it’s beginning to feel like propaganda. I overnight went from thinking “I make good money” with a respectable savings to going backwards every single month, and I am generally a VERY frugal person.
- bombcar 4y agoThere's no way to do "the main inflation number" and make everyone happy - because they have to try to find some way to include housing, and that either drags it way up or way down relative to how you "feel". If all other prices double, but you own or have fixed rent, you're going to feel it but the numbers will be muted; if all prices stay the same but your rent doubles, you're still going to feel it but the numbers will now seem off again.
- eldenwrong 4y agoThe official measures have always been BS. Its obvious to everyone now. Hedonic adjustments + flat out replacing expensive items for cheap items was always retarded
- snapcaster 4y agoBut they have to do something like this right? I mean, consumption patterns have obviously changed since the 1960s. I understand maybe the way they adjust isn't correct but if you think this is a really easy problem you probably haven't considered it enough
- silent_cal 4y agoNo they don't have to do something like this. The change in consumption patterns is caused by inflation and should be measured. If someone has to switch from buying steak to ground beef, it's not a change in preference. They've stopped buying something they can't afford.
- swayvil 4y agoUnless they just redefined inflation. I'll believe it when the prices stop jumping. Also, given that the government is ultimately responsible here. And we pay taxes to the government. You'd think they might cut us some slack on that. Having fucked up and all.
- anotherman554 4y agoTaxes were lowered in 2017 when inflation was at 2%.
- desireco42 4y agoThat is not happening unfortunately, ever. They are hiring more people in IRS to shake down working people.
- ericd 4y agoNah, the IRS is in complete shambles, as anyone who’s had to deal with them over the last couple years can confirm. It seems pretty likely that they’re just trying to unshamble it.
- _-david-_ 4y agoAdding tens of thousands of people will solve their problems and won't increase audits on the average person?
- ericd 4y agoIt might, the auditing level right now is extremely low. I was saying that it’s probably not the main point of the additional funding, though, so much as getting closer to a baseline of reasonably functional taxing authority. They’re currently drowning in even basic processing.
- jdhn 4y agoLet's say that CPI drops even quicker than it went up due to a combo of rate hikes working, demand destruction, and supply chains clearing up. What would the Fed do in that case?
- Enginerrrd 4y agoPotentially end up with significant asset deflation. This is actually a big concern of mine. We were in a definite asset bubble to begin with, so some correction was expected. But I'm concerned the fed's levers against inflation are slow ones and that we could see a real deflationary economy coming up here. The economy has been fast to fall and slow to recover, so the fed is, IMO, in danger of overshooting their soft landing significantly.
- bamboozled 4y agoDo assets here include property ?
- fuoqi 4y agoHow easy this value can be verified? In other words, do we have all inputs public and the algorithm (with all its "hedonistic adjustments") is fully accessible? Can we track changes in the algorithm? Even with the effect of high base, I am getting increasingly suspicious of official numbers (same with the unemployment statistics). Energy costs have skyrocketed and they get into almost everything an economy produces. I guess, we could get a bit clearer picture after the incoming midterms.
- upupandup 4y agoThe number the authorities give out is far removed from reality. Just head over to the grocery store. Try buying electronics. Inflation is still raging and I'm afraid they are just going to tell people suck it up. There is absolutely NO WAY inflation suddenly drops like this
- jonnycomputer 4y agoDon't be ridiculous. The Fed has aggressively raised interest rates and signals that it will continue to do so, and there is widespread worry about a recession. We've had two quarters of negative GDP growth! (though I tend to think the numbers will revised upward eventually).
- s1artibartfast 4y agoInflation is still positive so yeah, you'd expect prices to keep going up. Negative inflation would mean prices are going down
- propogandist 4y agothe govt changed the way CPI metric was calculated in January 2022 to mask some of the inflation https://twitter.com/truflation/status/1557349186466627586 https://twitter.com/truflation/status/1557349186466627586 https://youtube.com/watch?v=cb7oI8Hs16g https://youtube.com/watch?v=cb7oI8Hs16g http://www.shadowstats.com/alternate_data/inflation-charts http://www.shadowstats.com/alternate_data/inflation-charts
- desireco42 4y agoMy experience is that prices went 100% - 150% up. Things I care about went double, no amount of statistics engineering can change this fact. Fuel prices along, while it came down a little, they are still way high.
- upupandup 4y agoYet theres ppl, even on this thread that claims your views are conspiracy theory, that you are lying about what you saw.
- desireco42 4y agoClearly I am and that is just how things are. In general when the facts are not recognized ie. pretended that they are not happening, long term it is bad for the country as a whole.
- fleddr 4y agoI generally agree that CPI "feels" to be consistently lower compared to what actual people experience. But you can't have a meaningful discussion about it if you do not list the weight of the price hike in your expense pattern. When gas for your car normally takes up 10% of your income, and this price doubles, your personal inflation is 10%, not 100% (assuming no other price hikes).
- _-david-_ 4y agoJust to be clear. The person did not say it his personal inflation is 100%. He said prices increased by 100-150%. If item X usually costs $3 and now it costs $6. The price of that item increased by 100%. Perhaps he is only spending 10% of his income, but it doesn't really matter for what he is talking about.
- anotherman554 4y agoHe said the things he care about doubled in price. This is a remarkable claim. Even gas appears to have only gone up around 30% year over year: https://www.eia.gov/dnav/pet/hist/LeafHandler.ashx?n=pet&s=emm_epm0_pte_nus_dpg&f=m https://www.eia.gov/dnav/pet/hist/LeafHandler.ashx?n=pet&s=e...
- ospzfmbbzr 4y ago"Government theft drops to 8.5% annual rate" -- There I fixed the headline Inflation is a hidden tax that the public has been PR'd into thinking is acceptable.
- Sohcahtoa82 4y agoFor the individual, yes, inflation feels bad knowing that the dollar you make today will be worth less next year. But at the macro level, it encourages people to spend money, fueling the economy. An economy doesn't work on investments alone, people need to buy products and services.
- UncleMeat 4y agoLet's say inflation is at 0%. Then McDonalds decides to double all of their prices for no reason other than that they want more money. Measured inflation will now be greater than 0%. Was that the government stealing money from you? Money creation is part of the story of inflation, but it isn't the end of the story.
- soupfordummies 4y agoSome random things I've noticed in my personal experience during the last few weeks that are inflated at way above 8.5%: Gasoline (gallon) - 3.00 last summer, 3.75 today (25% increase) Towing a Car (~50mi Round Trip) - 125 last summer, 350 today. (180% increase!) Bag of Dorito's - 4.50 last summer, 6 today (33% increase) Can of Spray Paint - 4.25 last Summer, 6.50 today (54% increase)
- upupandup 4y ago
- scottLobster 4y agoCareful with that last line. Toward the end Trump was making some serious moves towards not accepting the outcome of the election, and the idea that the election was "stolen" is still the going line in Trump circles. Say what you will about the Biden administration, at least it's not threatening to burn the house down out of spite.
- DontchaKnowit 4y agoReally? Cause democrats are openly talking about abolishing the filibuster and packing the Supreme Court currently. Same shit different day, different faces.
- tstrimple 4y agoYou're equating using the levers of power as defined by our laws and constitution to trying to overthrow the results of an election. And you'll find far more Republican supporters of overthrowing a duly elected government than you'll find Democrats who want to end the filibuster. We have real evidence based on numbers that indicate this. You can't "both sides" your way out of attempting to overthrow democracy.
- jagraff 4y agoI'm not sure how anyone could honestly support the filibuster. It's extremely undemocratic and has mostly been used to prevent civil rights legislation and keep racism enshrined in law in the US. It wasn't even an intended mechanism of law in the constitution - it was introduced by accident, and only "discovered" as a mechanism to delay government action decades later.
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- jacknews 4y ago
- upupandup 4y agoThis is just going to push people further and further away into fringes and extremist views when they are lied to. We are truly on our own now. Our government no longer serves the people but a smaller proportion of people that gets their representatives elected to spread lies about everything. This garbage inflation number is just the beginning. Who knows what other absurdities they are willing to push to the public and punish people? I'm already seeing people who don't buy this number getting flagged on HN which is bound to have lot of affuluent ppl that benefit by pushing this number.
- jonnycomputer 4y agoYou aren't being lied to. if, as you seem to think, the government wanted to hide true inflation, you'd think they'd do a better job, right? you think Biden wants these high inflation numbers? what a joke. you're already on the fringe.
- jacknews 4y agoHe certainly doesn't want highER numbers. It isn't that the published inflation figures are falsified, or lies. They just don't truly reflect the cost of living, due to adjustments, hedonics, omissions, choice of basket items, product crapification and shrinkage, etc. But with so many dissenting posts here getting flagged, you have to wonder.
- jonnycomputer 4y agoThey actually publish multiple indexes. I think it is hard enough a problem that a lot of people find can find something they don't like about any one of them.
- UncleMeat 4y ago
- tonmoy 4y agoLooking at the different categories, it seems fuel, energy and fuel commodities were the worst offenders for inflation and their inflation dropped the most this month as well
- faangiq 4y agoHome prices doubling every 5 years no problem …
- kurupt213 4y agoDrops, while accurate, feels so disingenuous. The messaging should be that it’s slowing down
- sacred_numbers 4y agoPrice levels actually did drop compared to June. If anything I bet people are more likely to interpret this incorrectly by believing that prices are still rising compared to last month, just at a lower rate. They are not, it's just that with a n indicator that compares current price levels to price levels a year ago it takes a while for the rate to come down, even if prices stay still or slightly decrease.
- s1artibartfast 4y agoDid prices actually drop or did they just go up more slowly? 8.5% is still a price increase
- doubleunplussed 4y ago8.5% is the year-on-year figure. The month-on-month figure was 0.0%, so prices neither grew nor fell on average in July.
- s1artibartfast 4y agoLooks like gas went down and other goods went up
- scottLobster 4y agoGreat. All I know is I'm trading a lot more time for money this year. Way less takeout, avoiding toll roads unless it saves at least 30 minutes, fewer streaming services (will renew on a show-by-show basis), and food is getting so crazy I might start going to multiple stores to try and save money instead of my one consolidated trip to Wegmans. I'm also stuffing my freezer with meat and have a year's supply of non-perishables, not because I'm a prepper but because I know it'll be so much more expensive next year as to be worth it. Also my rent is up 6.9%, but that's because I locked it in for two years. Would have been 10.5% for a one-year lease, and that's on top of last year's comparatively conservative 4.5% increase. And my salary is up a mere 4.5%, and that only because I took on stretch assignments at work.
- dmix 4y agoI'm doing the same (mostly just to buy a house) and I've been using YNAB to budget money: https://www.youneedabudget.com/ https://www.youneedabudget.com/ It's really good, knowing where you're money is going ahead of time removes so much guilt and anxiety.
- scottLobster 4y agoOh yeah, I use Mint for the same. It's really fun watching my cost-cutting measures getting eaten alive by inflation in real-time :) I also find myself slowly sliding down Maslow's hierarchy. I used to be focused on achieving my dream job, now I'm strongly considering work I don't like because it pays more (being the sole income for my family is a major factor there as well). "Good enough pay for awesome work" is not a viable objective at the moment. And I'm lucky to even have that option. Something's got to give. Thankfully we're starting to see some actual government investment in US industry for the first time in forever, but it'll take years for any results to bring down prices.
- dmix 4y agoYeah it's amazing how much you can accomplish just by minor things like not using DoorDash constantly and having caps on spending on electronics on Amazon. YNAB is much nicer than Mint IMO. Mint feels more like a toy. With YNAB you do something called "envelope budgeting" (just a digital version) https://www.thebalance.com/what-is-envelope-budgeting-1293682 https://www.thebalance.com/what-is-envelope-budgeting-129368... I've found being obsessive with tracking expenses is a good way to lose motivation (like going to the gym) so it's good to have a simple pattern to get used to.
- swayvil 4y agoI live in a small college town in the midst of farmland and forest. Very poor. Some of the lowest income in the country. But taxes are crazy high. Property, sales. Higher than some big cities. It's stupid expensive, unless you are on the dole. About half the population is on the dole here. (We do have a very nice state-of-the-art triple-sized police station tho. And two marijuana dispensaries) That really is the only solution to this mess. Put everybody on the dole. Like medieval serfs except with cellphones. Abandon freedom and property. Let daddy government take care of you.
- dmix 4y agoGiven all of the COVID money, trillion dollar spending bills, supply chain issues, etc have been building up over the last few years, why does inflation ramp up suddenly all at once? Shouldn't it be more gradual? https://static01.nyt.com/images/2022/08/09/business/inflation-overall-promo/inflation-overall-promo-threeByTwoMediumAt2X-v3.png?format=pjpg&quality=75&auto=webp&disable=upscale https://static01.nyt.com/images/2022/08/09/business/inflatio... It this just purely gas prices? Or does the market just play along as if everything is good then freak out all at once?
- leppr 4y agoCOVID money also came with lockdowns, which reduced spending and thus delayed inflation. It also naturally takes time for inflation to travel from assets to commodities to consumer goods. Furthermore there was no justification for raising prices other than "there's now a lot more money floating around, it's a free market baby". Citizens wouldn't accept that, especially as most of them didn't get much richer from COVID money (mostly only asset owners did). But they can accept inflation when it's "caused" by a war instigated by a foreign dictator villain.
- fleddr 4y agoAll the war-related supply issues are sudden, not building up over the last years.
- jpadkins 4y agosticky prices https://scholar.google.com/scholar?hl=en&as_sdt=0%2C39&q=sticky+prices&btnG= https://scholar.google.com/scholar?hl=en&as_sdt=0%2C39&q=sti... roughly, changing prices has transactional and psychological effects, so suppliers hold out on price changes as long as possible, then do bigger changes (especially in non-liquid markets). So we see fewer big step changes in prices than smaller continuous changes (except for things that are traded frequently, like commodities). Also there is a herd effect with consumer pricing. Once a market leader raises a price, that makes it 'safe' for other firms to match the price change.
- weberer 4y ago"In the fall of 1972, President Nixon announced that the rate of increase of inflation was decreasing. This was the first time a sitting president used the third derivative to advance his case for reelection." - Civ5
- jjcon 4y agoWould that be third derivative or just second? My brain doesn’t want to parse that
- joenot443 4y agoAcceleration of inflation is the second derivative, the rate of change of that acceleration (what Nixon is referring to), is the third.
- huevosabio 4y agoinflation = d price / dt "rate of increase of inflation" (RII) = d inflation / dt "decreasing rate of increase" = d RII / dt
- ericsoderstrom 4y agoYes, because inflation is already the first derivative of cost. So the 'rate of increase' of inflation is the second derivative. And to say that the second derivative is decreasing is another way of saying the third derivative is negative
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- voz_ 4y ago> the rate (y) of increase of inflation (x) was decreasing (z). I guess first, does he mean that y, the rate at which x increases is going down by z? or that y is down, but z is not its rate? And second, if you see inflation here as a derivative or not.
- jmyeet 4y agoThe two biggest direct components to inflation are energy and housing. We have a slightly distorted picture here because the prices for both of these were in a slump during the pandemic. Moratoriums, less travel, less commuting, that sort of thing. So part of this is a reversion to mean. But on top of that we've had a genuine demand shock as everyone has decided this year to travel. This might've been fine had the companies taken the Covid relief funds and not laid off staff like they were supposed to but they didn't. And they refuse to now pay market rates. Reminder: there is no such thing as a labor shortage. There are only under-market wages. But what we've had is this spike in inflation and the thing about inflation is that inflation tends to begat inflation. By this I mean that companies tend to start charging more anticipating further inflation. What does this do? It drives up inflation. Profits aren't hurting because of inflation. The likes of Exxon and Chevron are making money hand over fist. What does the government do? Raises interest rates to tackle inflation while suspending gasoline taxes. You can also tackle demand with taxation like a windfall tax. While inflation is above, say, 4%, you could simply charge an additional 30% corporate income tax. Reminder #2: corporate taxes are only paid on profits. You could then use this money to help those most hurt by inflation. As for inflation dropping, that's not surprising at all. The writing was on the wall months ago as gasoline inventories started to rise as the demand-supply mismatch started to correct itself. Next year you'll probably be paying $2.50/gallon for gas.
- hatware 4y agoI just want some god damned accountability.
- jldugger 4y agoUnfortunately, Putin has a nuclear umbrella and the wagner group. It seems unlikely he will be held accountable.
- hatware 4y agoAccountability is a many-way street. Can't keep blaming the boogeymen when everything is a trick.
- jldugger 4y agoWell, you haven't named anything yourself. Please, enlighten us. But before you answer, remember that the UK didnt do any stimulative action like the US did and yet they have similar inflation problems. As does Europe.
- stall84 4y agoI'm sure everyone noticed .. but the ONLY index that actually deflated (decreased) this past month was gasoline. .. Not energy (electric, nat-gas, gas).. JUST gasoline.. It declined nearly 8% (significant) net-nulling the rest of the indexes which all continued to increase (food, building, all-other-energy-forms).
- remflight 4y agoThey like to ignore gas prices when it’s not convenient and include it when it is.
- woopwoop 4y agoIt's always interesting how on this website the economic news is actually worse than what the indicators say. Good or bad news, they're always lying to make it seem better than it is.
- kjkjadksj 4y agoBecause if they tell the truth and crash the market the outcomes are even worse for people
- yalogin 4y agoAll I know is the stock market is really antsy and wants to be done with this whole “inflation/recession crap”. They want to leave that behind and go back to the old times of worry free trading. Any moderate or neutral news is taken to positive and there is going to push it up
- hajile 4y agoMedian income in 1990 was $50,500. Adjusting for inflation using CPI, that's $102,700 in 2020 money, but median income for 2020 was actually $67,500. Since 2020, this has been kicked into overdrive. I believe wholesale goods inflation is somewhere near 30% since the pandemic began (inflation numbers look lower because services -- aka wages -- don't increase at the same amount). The only people immune to inflation are the rich who have hard assets that aren't affected by inflation. If people really understood how badly they are getting screwed by inflation, there would be riots.
- twoodfin 4y agoMedian income in 1990 was $50,500. That's already in CPI-adjusted dollars. Nominal median household income in 1990 was $30k: https://fred.stlouisfed.org/series/MEHOINUSA646N https://fred.stlouisfed.org/series/MEHOINUSA646N
- zht 4y agoim always curious about people (not you, the person you are replying to) who pop out metrics like these and mis-interpret them (not maliciously I'm assuming). I always wonder how many people they've repeated those facts to (most of whom won't fact check or think twice about it) and how many of THOSE people repeated them to other people THEY know.
- twoodfin 4y agoI'm less interested in the people since it's pretty obvious why these "factoids" are so appealing to believe & spread. I find it more fun to catalog the more common ones and track their origins. Two of my favorites: - "Medical debt is the #1 cause of bankruptcies." This goes back to a handful of papers by, among others, now-Senator Elizabeth Warren and colleagues at the Harvard School of Public Health. There was a lot of back-and-forth at the time, but I'll sum up the objection to the thrust of the papers and the factoid: People who go into bankruptcy tend to have all kinds of debt, and the authors made no rigorous attempt to establish the specific "but-for" causality of medical debt. - "40% of Americans are living paycheck-to-paycheck." This comes, AFAICT, from the annual Federal Reserve "SHED" survey on household economic well-being. There's lots of good data in these, but downers somehow latched onto the "How would you handle an unexpected $400 expense?" question and interpreted any response other than paying it off in cash or equivalent as "living paycheck-to-paycheck". FWIW, the "pay it off" response has become more popular every year of the survey's existence, rising from 50% in 2013 to 68% in 2021[1]. [1] https://www.federalreserve.gov/publications/files/2021-report-economic-well-being-us-households-202205.pdf https://www.federalreserve.gov/publications/files/2021-repor...
- npc54321 4y ago
- homeland221 4y agoAnother questionable statistics. Bet in next announcement this number go up again. See if Fed will sit quiet and not raise any rate. Better tell Mark that his VR shouldnt have increase by 100 bucks! That is way higher than 8.5%. Same goes with those 6-7usd gas. Surely 8.5% on a dollar is just 8.5cent!
- skapadia 4y agoPretty much everything is still going up, and it'll all be be even more expensive next year. A reduction in inflation doesn't mean things get cheaper... they just get expensive slower than before. Doesn't change the fact that things became insanely expensive really fast the past couple years, and we're not likely to see real relief for a long time (if ever).
- figure8 4y agoIsn't the change in this yearly inflation number saying only that this July's inflation was less than last July's? So going up or down depends only on the monthly rate a year ago.
- hcurtiss 4y agoI think to most reasonable people, it's not fair to call it a "drop." It's a smaller increase than last month, but it's still a very meaningful increase in the cost of goods. Yes, my house is not burning as quickly, but make no mistake, it's still burning.
- ab_testing 4y agoI know the market is cheering this news, but isnt it depressing. That means the Fed will continue to raise raies until this number drops to around 2-4% range. Do they expect that to happen by the end of this year or will it be an year or more to get to that number. Sorry I am not an economist.
- danielmarkbruce 4y ago0% month over month should be the headline.
- standardUser 4y agoIf inflation hadn't been incredibly low for 20 years we'd probably be facing similar prices today without all the fanfare and complaining that comes with a sudden correction.
- jscipione 4y ago
- smiddereens 4y ago
- caycep 4y agogreat. what about wage growth?
- artur_makly 4y agoYou think you have inflation stress? check out Argentina you may learn a few life-hacks from them: https://www.nytimes.com/2022/08/06/business/inflation-argentina.html https://www.nytimes.com/2022/08/06/business/inflation-argent...
- lamontcg 4y ago> The index for all items less food and energy rose 5.9 percent over the past 12 months, the same increase as the period ending June. Fed is going to continue to increase rates. At some point the markets are going to wake up to that reality and tank. Then by holding rates high the Fed is going to break something in the economy and the recession will cause a financial crisis.
- FounderBurr 4y agoThese numbers are nonsense. Steak prices have doubled, not increased by 0.1%